Buyer Beware: Anti-dumping and Countervailing 101

It is no secret that globalization increases market competition.  Consumers are increasingly able to comb the global marketplace to find products that meet their demand at competitive prices. However, it is not unheard of that some foreign countries unfairly subsidize producers and exporters, or that a foreign exporter and producer sell their products to consumers at less than fair market value. Therefore, in an attempt to level the playing field back home in the United States, and to protect domestic industry, the International Trade Administration’s Antidumping and Countervailing Duty Operations Unit working in tandem with the Department of Commerce and Customs and Border Protection, enforce U.S. Antidumping Duty (ADD) and Countervailing Duty (CVD) laws that ensure higher rates of duty on products imported from countries and exporters found to be unfairly “dumping” their products into the US economy.

So, how does ADD and CVD impact the cost conscience and compliance minded importer? ADD and CVD rates are determined first by examining products in specific HTS headings imported from particular countries of manufacture that meet the scope of an ADD or CVD ruling. If a product is found to be subject to ADD and CVD, the importer is required to issue an ADD and/or CVD certificate at the time of importation stating the applicable case number, manufacturer, country of origin and a statement reading:

“I hereby certify that I (have) (have not) entered into any agreement or understanding for the payment or for the refunding to me, by the manufacturer, producer, seller, or exporter, of all or any part of the antidumping duties or countervailing duties assessed upon the following importations of (commodity) from (country): (List entry numbers) which have been purchased on or after (date of publication of antidumping notice suspending liquidation in the Federal Register) or purchased before (same date) but exported on or after (date of final determination of sales at less than fair value).”

Failure to file a certificate at the time of importation will result in a presumption that the importer was reimbursed the antidumping and/or countervailing and a penalty in the form of doubling of duties may be assessed.

After entry is made, liquidation will be suspended per 19 CFR 1504(c) and 19 CFR 159.12 (a) (2) and the importer will receive a CBP Form 4333A informing them of the suspension. Once the entry liquidates, the importer will receive a statement from CBP with the applicable duty rates. Duty rates for ADD and CVD differ from case to case and can be as high as 135%.

Importers can ensure compliance with ADD and CVD laws by keeping records of who and where the products are sourced at the time of purchase. Training on ADD and CVD laws and implications should begin with the sourcing department as the first line of defense in determining how much items cost and who a company is purchasing from. 

Allyn International’s experience and diverse global trade compliance background provides a strong foundation for client support. For more information on ADD or CVD, or to find out about how Allyn International can assist with your Trade Compliance program, contact sales@allynintl.com for more information.

Contributor: Danielle Brazil Hudson, LCB